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SMEFinancemart advises and enables Micro , Small and Medium Enterprises ( MSMEs) access finance for growth from a variety of financial institutions and government agencies. We clearly understand the need for funds and match it to the most appropriate financial product and most suitable lender.

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Prime Minister Employment Generation Programme (PMEGP)

This Prime Minister Employment Generation Programme (PMEGP) scheme is controlled by Ministry of Micro, Small and Medium Enterprises, Govt. of India.
This scheme is started by Khadi & Village Industries Commission (KVIC), Govt. of India as single nodal agency at National Level. At State Level, the Scheme is to be implemented by State Khadi & Village Industries Boards (KVIBs) in rural areas and by District Industries Centres (DICs) in Urban areas.
The Delhi Govt. has decided to allow the DKVIB to operate both in Rural and Urban Areas so as to enhance their functional operations keeping in view the shrinking of Rural Areas in Delhi on account of urbanization and regularization of many unauthorized colonies in Delhi by the Govt.

The salient features of this scheme are as under: -
(i) Quantum and Nature of Financial Assistance: -
The maximum cost of project/unit admissible under manufacturing sector is Rs.25 lacs.
The maximum cost of project/unit admissible under business / service sector is Rs.10 lacs.
Categories of beneficiaries under PMEGP
Beneficiary’s contribution
(of project cost)
Rate of Subsidy (of project cost)
Term loan
Area (location of project / unit)
The balance amount of the total project cost will be provided by Banks as term loan.
General Category
Special (including SC/ST etc.)
The Government subsidy under the scheme will be routed by KVIC through the identified banks for eventual distribution to the beneficiaries in their Bank Accounts. Banks will sanction 90% of the project cost in case of General Category of beneficiary / institution and 95% in case of special category of beneficiary / institution and disburse the full amount suitably for setting up the project.

(ii) Eligibility Condition: -

(i) Any individual, above 18 years of age
There will be no income ceiling for assistance for setting up projects under PMEGP.
For setting up of project costing above Rs.10 lakh in the manufacturing sector and above Rs. 5 lakh in the business /service sector, the beneficiaries should possess at least VIII standard pass educational qualification.
Assistance under the Scheme is available only for new projects sanctioned specifically under the PMEGP.
Self Help Groups (including those belonging to BPL provided that they have not availed benefits under any other Scheme) are also eligible for assistance under PMEGP.
Institutions registered under Societies Registration Act, 1860;
Production Co-operative Societies, and
Charitable Trusts.
Existing Units (under PMRY, REGP or any other scheme of Government of India or State Government) and the units that have already availed Government Subsidy under any other scheme of Government of India or State Government are not eligible.

   Over a month ago


Get your application, paperwork right SMEs have been the backbone of the Indian economy. Yet getting an SME loan is a challenging task for small businesses

You’re looking to set up your small business and need that push to get your plans going. Or you could be looking to expand your existing business and need the funding for acquiring new assets. A small and medium enterprise (SME) can have financial needs that require some amount of tailoring. An SME loan is a preferred funding option for small and medium entrepreneurs who are looking to fuel their business aspirations. Applying for an SME loan can be a challenging task if one does not know how to go about it, especially with the paperwork involved. Here we present a few tips on preparing your loan application and advice on getting the paperwork right. Do your research – Your choice of SME loan provider should be based on some good research into lending institutions and banks. Check if you already have good business relations with a bank as this can help with getting your loan approved. Read up online reviews on potential lenders. Generally, a bank with a large presence or network is considered ideal to borrow from. Check bank websites to get all the information and insight you need into the terms and conditions of different SME loans and compare. Choice matters – Review the types of businesses the bank deals in before choosing. What is the scope of tailoring the bank can provide to suit your unique business needs? What are the terms of repayment? Are there tax benefits? Is there an option of higher loan tenure to suit your requirements? Get your documents right – Banks and financial institutions look for a well-made business plan. To get internal approvals and sanctions they will try to ensure your application meets all the required criteria for their processes. It is very important that entrepreneurs examine the SME loan application form thoroughly. Clarifications and advice can be sought from the bank manager or customer care advisor. It is also a good idea to first download a sample bank loan application form to gain a better understanding. Make a note of the list of documents to be attached to the loan form. Once you’ve made a checklist of the important documents required, start preparing and putting them together. Keep your income documents, PAN card details and updated bank statements ready among other important documents. Here’s a useful checklist of some of the important documents you need to have ready: • Loan application form • Passport copy/ PAN/ Ration Card • Office address proof • Applicants’ passport size photographs • Certified copies of partnership deed / Memorandum of Association / Articles of Association • Repayment Track Record • Audited financials of 2 years • IT Returns of directors/partners of 2 years • Proforma invoice to the equipment to be financed • 6 months’ bank statement of primary account • Professional qualification certificates (necessary when applicable) Make a good application – Start preparing the application as early as possible to get all the right information and papers. This can keep the application free of errors and increase the chances of an approval. It is also a good idea to run your application through a customer care officer before filing. Be interview-ready – Be prepared to confidently present your business plan at the loan interview. You can have mock loan interviews to help you feel ready for the real one. Be absolutely clear while explaining how the loan money is going to be utilised in your business. Respect the loan officer’s time and speak to the point. Provide all the relevant information about yourself, your line of business and experience. Speak clearly about the loan amount required for investing. Be ready with whatever documents or materials you need to support your requirements – it could be your annual report, financial statements or a business brochure. Give as much background information on whom you would be purchasing goods or assets from and who your prospective customers would be. Discuss these matters with the bank before signing any agreements with other parties or make any payment arrangements. Understand borrowing costs - Try to avoid borrowing more than you need. Also check if you are borrowing for too long at a high interest rate. Banks usually push loan products that are the most lucrative to them or those with least risk. Check for the costs, fees, charges apart from the interest being paid. Fully understand the impact of these on your loan transaction. Would there be legal costs for drafting a loan contract? Seek all the clarification you need before deciding to commit. All in all, a good SME loan application makes a solid case for your business plan and increases the chance of funding your dream to reality.

   Over a month ago


Today, Small and Medium Enterprises (SMEs) make a very important contribution to the nation's economy with around 40% of India's domestic production. Obtaining a small business loan to set a new business venture is not an easy task. It requires a great deal of preparation. Besides, one also needs to obtain capital to fund their dreams, which can be fulfilled by applying for a small business loan in India. No matter what type of business loan you choose, you need to have everything in place for your loan to be approved before you even file the application.

Some of the major hurdles in the course of business development for SMEs include:

Financing: Lack of capital or access to timely financecan be termed as one of the biggest hurdles one may come across while setting up a new business.This could cause under-utilization of the manufacturing capabilities of SMEs.

Infrastructure: Infrastructure is important, however these facilities haven’t reached the desired level in this country yet. Lack of infrastructure may restrictsmall-time business initiatives in the SME sector. Hence, better infrastructural facilities need to be given priority.

Technology: It is indeed difficult for SMEs to make use of cutting-edge technology due to obvious expenses associated with it. Lack of technology may place them behind in the race for success.

A major handicap in the development of SMEs is their inability to access timely and adequate finance. There are several reasons for the problems faced by SME financing, the most common being the lack of credit information and low market credibility of SMEs. A start-up has got everything, the ideas, the desire, and the plan. The only problem faced by them is the shortage of capital.Applying for small business loans with banks can be easy or difficult, as it mostly depends on how capable and promising the business is.

Regenerate SME Financing

There is an urgent need to regenerate SME financing. As mentioned earlier, SMEs have very limited access to the capital markets. SMEs are by and large depended on borrowed funds from banks and financial institutions. The borrowed funds are usually in the form of extended working capital. Today, however, due to the growing demand, small business loans and working capital are made easily available by banks and financial institutions.Start-up businesses also have the option to obtain Unsecured Business Loans without any collateral, where the borrower need not pledge any of his property or asset.

As SMEs are known to nurture entrepreneurial talent, the talented lotneedsto be facilitated with the desired finance through guaranteed funds. Apart from being timely, SME finance also need to be cost effective. Since banks and financial institutions have fastened their lending policies, it has become all the more difficult for a budding entrepreneur to get credit. Thus, small-business needs to come up with more creative options to find sources of capital.

   Over a month ago

Government Schemes For Entrepreneurs

Prime Minister's Employment Generation Programme (PMEGP)

A national level credit linked subsidy scheme, namely, 'Prime Minister's Employment Generation Programme (PMEGP)'was introduced in August 2008 by merging erstwhile PMRY and REGP schemes of this Ministry during the four terminal years of XI plan (2008-09 to 2011-12) for generating an estimated 37.38 lakh additional employment opportunities. An outlay of Rs. 8060 crore including Rs. 7800 crore as margin money subsidy for PMEGP in the XII Plan has been approved by the Planning Commission. Since inception in 2008-09 to 2013-14, 2.48 lakh units have been assisted with margin money subsidy of Rs. 4745.15 crore to create employment for an estimated 22.29 lakh persons in the country. Under this programme, financial assistance is provided for setting up of micro enterprises each costing upto Rs.10 lakh in service sector and Rs.25 lakh in manufacturing sector. The assistance is provided in the form of subsidy upto 25 percent (35 percent for Special category including weaker sections) of the project cost in rural areas while it is 15 percent (25 percent for Special category including weaker sections) for urban areas. For 2014-15 an outlay of Rs 1418.28 crore has been earmarked for the scheme. The Guidelines of the schemes are available on the website of the Ministry of MSME.

Skill Development

Skill Development has been taken up as a high priority area by the Ministry through various measures like enhancing the training capabilities of the Tool Rooms, MSME Development Institutes and other organizations under Ministry of MSME. The range of training programme is enormous, covering grass root level programmes related to traditional rural industries/activities to high-end, high tech programmes on CNC machines and other high end technologies. The agencies under the Ministry of MSME conducted programmes for skill development for nearly 5.51 lakh trainees during the year 2013-14 and the target set for 2014-15 is 5.20 lakh persons. The Ministry of MSME provides all such trainings for SCs/STs free of cost. Special programmes are organized through MSME-DIs for weaker sections of the society viz., SC/STs, women and physically handicapped free of cost besides providing a monthly stipend of Rs. 125/- per week per candidate during the entire period of training.

Credit Guarantee Scheme

The Government is implementing the Credit Guarantee Fund Scheme for Micro and Small Enterprises with the objective of facilitating flow of credit to the MSEs, particularly to micro enterprises by providing guarantee cover for loans upto Rs.100 lakh without collateral / third party guarantees. For making the scheme more attractive to both lenders as well as borrowers, several modifications have been undertaken which, inter alia, include: (a) enhancement in the loan limit to Rs.100 lakh; (b) enhancement of guarantee cover from 75 percent to 85 percent for loans upto Rs. 5 lakh; (c) enhancement of guarantee cover from 75 percent to 80 percent for MSEs owned/operated by women and for loans in North Eastern Region (NER); (d) reduction in one-time guarantee fee from 1.5 percent to 1 percent and annual service charges from 0.75 percent to 0.5 percent for loans upto Rs. 5 lakh and (e) reduction in one-time guarantee fee for NER 1.5 percent to 0.75 percent etc.

As on 30th November, 2014, cumulatively, 16, 89, 439 proposals have been approved for guarantee cover for a total sanctioned loan amount of Rs. 84026.76 crore.
Credit Linked Capital Subsidy (CLCS) Scheme for Micro and Small Enterprises

The scheme was launched in October-2000 and revised from 29.9.2005. The revised scheme aims at facilitating technology up-gradation of Micro and Small Enterprises (MSEs) by providing 15 percent capital subsidy (limited to maximum Rs. 15 lakhs) for purchase of Plant & Machinery. Maximum limit of eligible loan for calculation of subsidy under the scheme is Rs. 100/- lakhs. Presently, 48 well established and improved technologies/sub sectors have been approved under the Scheme.

The CLCS Scheme is implemented through 10 nodal banks/agencies including SIDBI, NABARD.

Marketing Assistance Scheme

The main objectives of Marketing Assistance Scheme are to enhance the marketing competitiveness of the micro, small and medium enterprises to provide them a platform for interaction with the individual / institutional buyers, to update them with prevalent market scenario and to provide them a forum for redressing their problems. The National Small Industries Corporation Ltd. (NSIC), a public sector undertaking under the administrative control of this Ministry, acts as a facilitator to promote marketing efforts and enhance the competency of the MSMEs for capturing the new market opportunities by way of organizing / participating in various domestic & international exhibitions/trade fairs, buyers-seller meets, intensive campaigns/seminars and other marketing promotion activities.

An amount of Rs.14.00 crore has been allocated in the Budget Estimates for 2014-15 for this activity which is targeted to support participation in international and domestic exhibitions/trade fairs and buyer-seller meets and marketing campaigns.

Performance and Credit Rating Scheme

The National Small Industries Corporation Ltd. (NSIC), a public sector undertaking under the Ministry of MSME has been implementing "Performance & Credit Rating Scheme" for micro and small enterprises (MSEs) on behalf of the Government. The scheme is being operated through seven accredited rating agencies i.e. CRISIL, SMERA, ONICRA, CARE, FITCH, ICRA and M/s Brickworks. The scheme is aimed to create awareness amongst micro, small & medium enterprises about the strengths and weakness of their existing operations and to provide them an opportunity to enhance their organizational strengths and credit worthiness. The rating under the scheme serves as a trusted third party opinion on the capabilities and creditworthiness of the micro, small & medium enterprises. An independent rating by an accredited rating agency has a good acceptance from the Banks/Financial Institutions, Customers/Buyers and Vendors. Under this Scheme, rating fee to be paid by the micro, small & medium enterprises is subsidized for the first year only and that is subject to maximum of 75 percent of the fee or Rs. 40000/-, whichever is less.

BE for the scheme for 2014-15 is Rs. 70.00 crore and it is targeted to support rating of 16000 MSEs during the year.

International Cooperation Scheme

International Cooperation(IC) Scheme is being implemented by the Ministry of MSME since 1996. Technology infusion and /or upgradation of Indian micro, small and medium enterprises (MSMEs), their modernization and promotion of their exports are the important objectives of the scheme.
The Scheme encompasses the following activities:
Deputation of MSME business delegations to other countries for exploring new areas of technology infusion/upgradation, facilitating joint ventures, improving market of MSMEs products, foreign collaborations, etc.
Participation by Indian MSMEs in international exhibitions, trade fairs and buyer-seller meets in foreign countries as well as in India, in which there is international participation.
Holding international conferences and seminars on topics and themes of interest to the MSMEs.
BE for 2014-15 is Rs. 5.00 crore and it is expected that 650 entrepreneurs would be facilitated to participate in 50 international events.

Assistance to Training Institutions

Under the scheme assistance is provided to existing and new training Institutions for establishment of Entrepreneurship Development Institute (EDI) and strengthening of their training infrastructure on a matching basis. Ministry provides assistance on a matching basis, not exceeding 50 percent of the project cost or Rs. 150 lakh whichever is less (90 percent or Rs. 270 lakh of the project cost whichever is less, for State level EDIs in Union Territories of Andaman & Nicobar and Lakshadweep Islands) excluding cost of land and working capital. The balance 50 percent of the matching contribution (10 percent for State level EDIs in Union Territories of Andaman & Nicobar and Lakshadweep Islands) should come from the concerned Institute, State/UT Government, public funded institution(s), NGOs/Trusts/ Banks/Companies/ Societies/ Voluntary organizations etc.

The assistance would be for creation of infrastructure. The land will have to be provided by the State Government or any other institution or by the applicant. Financial assistance would be for construction of building, purchase of training aids/equipments, office equipments, computers and for providing other support services e.g. libraries/data bases etc. The costs of land, construction of staff quarters etc. would not qualify for calculation of matching grant from the Central Government. All the proposals under this scheme are required to be recommended by and routed through the concerned State/UT Government.

A new component of training has been added under this scheme, i.e. assistance would be provided under the scheme to following Training Institutions, for conducting Entrepreneurship Development Programmes (EDPs) and Entrepreneurship cum Skill Development Programmes (ESDPs) and Training of Trainers (ToTs) programmes in the areas of Entrepreneurship and/or Skill Development:
National level EDIs (including branches),
Training Institutions established by Partner Institutions (PIs) of national level EDIs,
Training/Incubation centers of NSIC,
Training cum Incubation Centers (TICs) set up by Franchisees of NSIC
Other Training institutions with proven professional competency, capacity and experience, approved under the scheme.
Entrepreneurship Skill Development (ESDP) training would normally be of 100 to 300 hours (1 to 3 months). Entrepreneurship Development (EDP) training would be of 72 hours (2 weeks) and Trainer's Training for 300 hours.

BE for 2014-15 is Rs. 132 crore and it is targeted to provide financial assistance to existing/new EDIs and to train 1, 37, 885 persons.

Udyami Helpline

A 'Udyami Helpline' (a Call Centre for MSMEs) with toll-free number 1800-180-6763 is in operation to provide information, support, guidance and assistance to first generation entrepreneurs as well as other existing entrepreneurs to guide them regarding various promotional schemes of the Government, procedural formalities required for setting up and running of the enterprise and help them in accessing Bank credit etc. The Udyami Helpline has become a useful tool for entrepreneurs and general public to gather information about various schemes of the Ministry.

Thrust on Khadi & Village Industry

It is a matter of great pride that the sale of Khadi and Village Industry products has recorded a quantum jump in sales after the appeal of the Hon'ble Prime Minister in his Radio address to the nation 'Mann ki Baat' on October 03, 2014 "to buy at least one 'Khadi' product for use in their day-to-day life. If you buy Khadi, you light the lamp of prosperity in the house of a poor person". This has re-energised the Khadi sector which has resulted in increase of sales at Khadi Gramudyog Bhawan, New Delhi by 125 percent compared to previous year sales. This was acknowledged by the Hon'ble Prime Minister on 02 November 2014 in the same programme. The appeal by the Hon'ble Prime Minister has evoked emotional response amongst the people more so the youth of the country which has resulted in a new lease of life to Khadi sector. Khadi & Village Industries Commission (KVIC) has also risen to the occasion by renovating the Khadi Gramudyog Bhawan, New Delhi and ensuring that a wide variety of Khadi and Village Industry products are showcased to cover all age groups, all sections of textile market, such as Designer wear, home furnishing, upholstery, woolens including Pashmina, bridal wear, wide range of sarees from across the country, office wear, casual wear, children wear, ready to use and readymade dresses. In addition a wide range of Village Industry products such as Handmade Paper & products, Honey, Natural soaps, Incence sticks, Herbal Beauty & Health care products, Jewellery and gift items and decorative, household artefacts, household grocery items which are ready to eat and organic farm products.

In order to give a Youth Centric focus, KVIC has extended a special discount for students on the occasion of International Youth Day and Gandhi Jayanthi. KVIC is also taking Khadi to schools, colleges, universities, IITs, ITIs and other educational/ technical institutions by organizing college fest, fashion shows, awareness programmes and competitions to attract the youth.

In addition, KVIC has been for a long time supplier of Khadi products for key sectors like Railways and Defence and with the opening of Defence sector for domestic manufacturers and suppliers, KVIC is in the process of gearing up to explore this sector aggressively. (Source: PIB)

   Over a month ago

The Year For SMEs !

In 2014, India’s micro, small and medium enterprises got a fair share of attention from the government. In the Union budget for 2014-15, the government announced a R10, 000-crore fund to act as a catalyst for the MSME sector. A sum of R200 crore was earmarked to set up a technology centre network to promote innovation, entrepreneurship and agro-industry. Although things are yet to fall in place, we can expect substantial momentum on these in the new year.
The success achieved by the recent start-ups show a promising future for the MSME sector. The government is taking various measures to increase the sector’s competitiveness in the international market.
Prime Minister Narendra Modi’s Independence Day speech gave an impetus to the sector’s aspirations. The “Make in India” campaign, inviting foreign manufacturers to pace up India’s industrial growth, opens myriad opportunities for the sector. So does the Digital India initiative. The youth of India has been given a playground to come and unleash their entrepreneurial skills.
States have joined the efforts in their own way. For instance, the government of Karnataka provides several facilities to the start-up community of the state. For providing global exposure and mentoring to the start-ups in the state, the UK Trade and Investment Board has recently come into a partnership with the Karnataka Information Technology Venture Capital Fund. The state is planning to set up two new venture funds and a network of incubators in small cities to pace up entrepreneurial activities.
Similarly in Kerala, the government would invest 1% of the state’s budget in the new start-ups mushrooming in the state. The Start-up Village of Kochi was established through a public-private partnership to nurture around 1, 000 start-ups over 10 years. The Maharashtra government gives many incentives for MSMEs, ranging from power tariff subsidy to tax refunds.
The Maharashtra Centre for Entrepreneurship Development, an autonomous body under the department of industries, offers entrepreneurship training programmes focused on banking, food processing, agritech and others across the state.
West Bengal is one of the leading states in terms of credit flow to the MSME sector. The state government has set up as one common link for all applications. The Telangana government proposed a new industrial policy from December 1 which speaks about a separate empowered State-Level Bankers’ Committee exclusively for SMEs and creation of an Insurance Fund as well. Rajasthan has a huge potential of being developed as the SME hub of India. Power2SME is closely working with the SME segment in the region to provide it with a platform for easy credit and cheaper raw material.
The Swachh Bharat programme has also opened up a host of opportunities for start-ups, especially for those in the health, hygiene and sanitation segments.
Apart from government initiatives, funding by local and foreign investors, introduction of advanced technologies in the market and online platforms like retail and trade portals have aided the growth of SMEs in 2014. For instance, free online financing platforms like were launched to make borrowing easy for SMEs, while the buzz around Flipkart and Snapdeal helped several SMEs to opt for online marketing.
With the forward looking policies of the central and state governments, the MSME sector has high hopes from 2015. The central government has already announced its plan to expand the scope of the ‘Make in India’ programme by including five more sectors, including gems & jewellery and SMEs in it. I strongly feel 2015 is the year for the SME sector and the coming decade will prove as a golden decade for the SME segment in India

   Over a month ago